Throw cold water on bulk-water export opposition

A recent special report on water in The Economist offered a provocative comment: "The trouble with water is that it's all politics, no economics." How else to explain why a pro-free-trade government in one of the world's most water-endowed countries would seek to ban bulk water exports? That's what Canada's proposed Transboundary Waters Protection Act, introduced by Foreign Affairs Minister Lawrence Cannon last month, would do. Driving the Conservative government's proposed ban are opinion polls showing two-thirds of Canadians oppose water exports.

Politics do indeed make strange bedfellows. Mr. Cannon's statement of the government's "resolve to make sure there are no exports of bulk" resonated among left-wing, anti-free-trade groups, such as the Council of Canadians. But do the council's arguments hold water?

The council's website lists "five reasons to oppose bulk water exports," drawn from a 2007 council publication. Let's take a look at each of them.

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1. Canada does not have a surplus of water. The council notes that many municipalities have experienced water shortages. This is true, but almost every shortage can be traced to problematic management of local distribution utilities. For example, the municipal council's dithering about expansion of a water reservoir forced Tofino, B.C., to shut down tourist resorts, even though the town is located in a West Coast rain forest with annual rainfall of about 300 centimetres.

Natural Resources Canada estimates that Canada holds 9 per cent of the global renewable fresh water supply, yet we have only one-half of 1 per cent of the global population. Nearly 9 per cent of our land mass is covered by some two million lakes, including some of the world's largest: Lake Superior ranks second in the world, Huron fourth, Great Bear eighth, Great Slave ninth, Erie 10th, Winnipeg 11th, Ontario 13th and Athabasca 22nd.

Enormous amounts of potential fresh water exports flow virtually untouched into the sea. The Mackenzie River, for example, flows to the Beaufort Sea in volumes equal to the mighty St. Lawrence. The Nelson River flows north from Lake Winnipeg discharging into Hudson's Bay at rates almost equal to the Columbia. Canadian rivers discharge some 9 per cent of the world's renewable fresh water supply in to the ocean.

3.Trade agreements could open the floodgates. The council argues that the North America free trade agreement's fair treatment of investor provisions would prevent Canada from controlling water-export projects financed by U.S. investors. This rhetoric harkens back to a tired old canard that the council has been citing since its fight to stop the agreement two decades ago. The fact is, any bulk water export would be subject to extreme regulatory scrutiny before a permit would be granted.

4.Canada has no ban on bulk exports. That a ban will soon be in place is a huge lost opportunity for our country. Quebec's electricity exports to the United States aided power-project economics and reduced local electricity rates, while bringing in big export revenues. A recent study by the Montreal Economics Institute predicts similar benefits to the province by capturing water from rivers flowing north to James Bay, creating jobs and yielding tens of billions of dollars in export revenues. A proposed pipeline to take surplus fresh water from Manitoba to Texas could potentially double provincial government revenues. More broadly across the country, projects moving even a small portion of the enormous volumes of fresh water being lost to the ocean could bring construction jobs and export wealth, while also providing the economics of scale needed to bring additional supplies for agricultural and municipal use in drier regions of southern Canada.

5. The security and prosperity partnership means water is on the table. Here, the council was referring to a 2005 Canada-U.S.-Mexico government and business initiative to foster mutual co-operation and security. One of Canada's key objectives was to untangle the trade-debilitating border bureaucracy. Any subject of potential mutual benefit is fair game. The council noted that "leaked documents … indicate that bulk water exports have been a subject of discussion." The question is, why on earth wouldn't they be?

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Along with the "water is not a commodity to be bought and sold" religion espoused by the Council of Canadians, many environmentalists are opposed to inter-basin water transfers. A clear-headed comparison of the environmental impacts of carefully chosen water-export projects with that of our leading resource industries - including mining, oil and forest products - would show water transfers to be one of the cleanest possible ways of creating new investment, jobs and deficit-reducing government revenues. And those who stay awake worrying about rising sea levels could be pleased to see a little less water pouring into the world's oceans.

Gwyn Morgan rose from his modest roots on an Alberta farm to become one of Canada’s foremost business leaders and ardent champion of the importance of Canadian-headquartered international enterprises. Gwyn has served on the board of directors of five global corporations. More

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